Seprod expanding warehousing space

Seprod is building out new warehouse space at its main complex in Kingston's industrial zone, which is said to be part of a larger hub that the company will build out over time.

Seprod has not disclosed the size of the investment, which is meant to provide space for the Facey Consumer business acquired from the Facey Group for US$53.8 million for cash and shares. Sources say, however, that the new warehouse and infrastructural works is costing around $300 million.

CEO Richard Pandohie confirmed the construction activity, but opted not to comment on the larger project.

"Yes, we're doing about 50,000 square feet of space, and this should enhance our capacity to take care of the natural cycles of production and supply," he said of the current project.

Group Project Manager Milton Maragh told the Financial Gleaner that the new warehouse is being constructed at the rear of the Seprod headquarters on Felix Fox Boulevard by Chinese contractor BYD Construction.

The company, which owns and distributes multiple brands, including Miracle, Serge, Butterkist, Golden Seal margarine and Betty condensed milk, among others, had signalled to shareholders that it would be building out its distribution arm to grow the conglomerate.

Up to that point, distribution handled in-house was done by its subsidiary, Industrial Sales, and a mix of contract companies. Seprod said Thursday that it plans to keep Industrial Sales and the Facey Consumer business as separate operations.

Seprod's acquisition of Facey Consumer was announced in March and finalised six months later in September. Seprod paid cash of US$16 million and distributed shares to Facey Group worth US$37.8 million - valuing the transaction at $53.8 million.

The acquisition will add around US$130 million to Seprod's sales. Facey Consumer's bottom line numbers have not been disclosed, but at the operating level, measured by EBITDA, the company generated midline profit of US$9.16 million and was track to hit US$10 million this year, based on annualised data.